Announcement about impending layoffs can be alarming for any employee. Equally nerve-wracking is the after-effect of losing a coworker once the layoffs are over. Employees who are retained often go through mixed feelings of relief and guilt that can be unsettling for them and unproductive for an organisation. Any organisation, irrespective of its size or the robustness of its strategy, may go through a lean period that forces it to downsize its employee strength to cut operational costs.
Likewise, if the organisation decides to outsource a portion of its non-core functions to an external agency, it may have to lay off its employees to avoid overstaffing due to redundancy of roles. Besides these common reasons for layoffs, change of leadership due to merger and acquisition may result in layoffs as the new leadership will have fresh objectives. Whatever be the reason, layoffs have to be handled with utmost care to avoid negative fallouts. Formal sectors like IT, healthcare and e-commerce are going through uncertain times, mainly due to global political and economic reforms. For instance, when there are certain rate cuts made by an international client on account of policy changes in their geographical location, IT/ITeS companies in India offering services to the client will feel the brunt and try to cut losses by laying off full-time employees. Similarly, when processes become fully automated, human employees become redundant. This can be disturbing for employees in the formal sector who are used to fixed salaries and full-time jobs. Unlike the formal sector, the informal sector operates on marginal profits compelling employers to hire contractual or part-time workers. Small and micro-enterprises that operate on very low budgets and shifting workforce are the order of the day.
Individuals in the informal sector are well aware of the job risks and fear layoffs and pay cuts. This fear has led these informal workers to develop survival skills, which include being able to adapt to any adverse situation that comes their way and make the best of it.
What with all the harsh circumstances that come in the way of the informal sector in India, the workforce has become more agile and resilient, working together in unity, contributing to 7.6% of GDP. In this context, employees in the formal sector have a lot to learn about coping with uncertainties at their workplaces.
They should draw inspiration from the energetic workers who are used to financial insecurity and job cuts in their space. With the right attitude, workers in the formal sector can see layoffs as a signal to move on to more innovative projects or opportunity to begin their own entrepreneurial journey by acknowledging their professional strengths and using their existing network.
As contractual and project-based employees, those working in the informal sector are better equipped to look for continuous source of income by learning industry-aligned skills to ensure sustainability. Contrary to this, habituated by a more structured and organised format, the employees in the formal sector stumble in the face of change and take more time to adjust to new conditions. They are used to a predetermined career path that leads to complacency.
These employees can adopt the irrepressible spirit of an informal worker who fights all odds to get skilled and find better livelihood opportunities through lifelong learning. Since more and more non-core business functions are being outsourced to cut costs, the formal sector is slowly turning less-organised. Dependency on third parties is the primary reason for such a trend.
Therefore, the formal sector too is witnessing quite a few contractual openings with less job security. This would mean that the employees have to get industry-ready like their counterparts in the informal sector and continue to carve their own career paths by leaving their comfort zones.
Due to the volatile nature of the informal sector, workers and supervisors there tend to build their own professional community through continuous networking.
They lean on each other for gaining entry into various blue-collar jobs or starting their own micro-enterprises.
For instance, in the auto service sector, workers pool in their resources and skills to set up small-scale service centres in semi-urban or rural areas, catering to their community.
Such trends are seen in the apparel and construction sectors too where there are close-knit communities and support groups that stand united to upskill, re-skill and market themselves to stay employed or turn into micro-entrepreneurs. Women from low-income households are coming forward and turning into beauty-preneurs, opening their own parlours with support from their network. The formal sector too must focus on creating such networks that could become a safety net in the long run, providing them with better opportunities to keep their career rolling.
In this volatile market, holding on to a single opportunity for long is not realistic. The workforce in the formal sector must roll up their sleeves and look for fresh opportunities and seize them, when they are found, like the informal workers who thrive in the face of uncertainties.